Formulary Management Methods and Pharmacoeconomics

61%. The pharmacist intervention produced a 31% average savings for all HP eradication by increasing the utilization of the lower-cost BMT regimen and reducing utilization (from 74% to 26%) of the higher-cost OAC (omeprazole, amoxicillin, and clarithromycin) regimen. Cost-effectiveness might also be achieved via 1-week HP eradication recipes with PPI pantoprazole. Seven-day regimens including either twice-daily pantoprazole 40 mg, amoxicillin 1,000 mg, and clarithromycin 500 mg (“PAC7”) or twice-daily pantoprazole 40 mg, bismuth subcitrate 108 mg 4 times daily, tetracycline 500 mg 4 times daily, and metronidazole 200 mg 3 times daily and 400 mg at night (“PBMT7”) produced similar HP eradication rates, 78% and 82%, respectively, both superior in clinical outcome to 69% HP eradication achieved with 14 days of BMT without PPI. As is often the case in medicine, the challenge is to identify those patients who are most likely to benefit from the intervention (sensitivity) and exclude those patients unlikely to benefit from the intervention (specificity). Long-term use of acid-suppression therapy, histamine-2 receptor antagonists (H2RAs) in the 1980s to the end of the 1990s and supplanted by PPIs in the middle 1990s, can be expensive and a drain on the financial resources of health plans. Introduction of generic cimetidine, followed by generic ranitidine, famotidine, and nizatidine, reduced the average annual cost of H2RA therapy from nearly $1,000 per patient to less than $250 per patient. The introduction of generic omeprazole at year-end 2002 had not by mid2003 reduced significantly the average annual PPI cost of nearly $1,500 per patient per year, before copayment. A study of 1,007 patients on long-term H2RA therapy (defined as 6 months or more) found that PUD was the most common indication for H2RA prescribing (42%). PUD was found in 58% of patients receiving long-term H2RA drug therapy who had their HP serology tested and were HP-positive. While two thirds (67%) of the patients reported improvement in quality of life following HP eradication, and H2RA use was reduced, there is no guarantee that PUD patients treated with an HP-eradication recipe will discontinue use of H2RA or PPI drug therapy. The findings noted above, in which clinical pharmacist intervention in an HP-eradication intervention was associated with no resumption of acid suppression therapy at 1-month follow-up, need validation over a longer follow-up period. It is entirely possible that HP eradication, achieved at any incremental cost as measured in total prescription drug expenditures, results in some relief of symptoms in a majority of patients on long-term acid-suppression therapy. For managed care organizations in 2003, the direct drug cost at discounted prices, before member copayment or pharmacy dispensing fees, was about $44 for quadruple therapy for 7 days with PBMT7 or $102 for 7 days with triple therapy PAC7, compared with about $250 for the commercial packaging of 14 days of therapy with lansoprazole, amoxicillin, and clarithromycin. Avoidance of even 1 month of therapy with a PPI in 1 of 2 patients treated with PBMT7 or PAC7 would cover the direct drug cost of most HP eradication recipes. For patients with PUD, HP infection is present in 85% to 95% of patients, and eradicating HP is effective in healing the ulcers. For patients with NUD, the relative risk reduction for persistent dyspeptic symptoms (the same or worse) at 3 to 12 months following HP eradication is 9% compared with placebo, and the number needed to treat is 15 NUD patients to obtain 1 case of cured dyspepsia. The cost to obtain 1 dyspeptic-free NUD patient with PBMT7, the lowest-cost therapy, is therefore $660 in 2003 dollars versus $1,530 for PAC7 or $3,750 for the commercial package of lansoprazole, amoxicillin, and clarithromycin.

61%. 14 The pharmacist intervention produced a 31% average savings for all HP eradication by increasing the utilization of the lower-cost BMT regimen and reducing utilization (from 74% to 26%) of the higher-cost OAC (omeprazole, amoxicillin, and clarithromycin) regimen. Cost-effectiveness might also be achieved via 1-week HP eradication recipes with PPI pantoprazole. Seven-day regimens including either twice-daily pantoprazole 40 mg, amoxicillin 1,000 mg, and clarithromycin 500 mg ("PAC7") or twice-daily pantoprazole 40 mg, bismuth subcitrate 108 mg 4 times daily, tetracycline 500 mg 4 times daily, and metronidazole 200 mg 3 times daily and 400 mg at night ("PBMT7") produced similar HP eradication rates, 78% and 82%, respectively, both superior in clinical outcome to 69% HP eradication achieved with 14 days of BMT without PPI. 15 As is often the case in medicine, the challenge is to identify those patients who are most likely to benefit from the intervention (sensitivity) and exclude those patients unlikely to benefit from the intervention (specificity). Long-term use of acid-suppression therapy, histamine-2 receptor antagonists (H2RAs) in the 1980s to the end of the 1990s and supplanted by PPIs in the middle 1990s, can be expensive and a drain on the financial resources of health plans. Introduction of generic cimetidine, followed by generic ranitidine, famotidine, and nizatidine, reduced the average annual cost of H2RA therapy from nearly $1,000 per patient to less than $250 per patient. The introduction of generic omeprazole at year-end 2002 had not by mid-2003 reduced significantly the average annual PPI cost of nearly $1,500 per patient per year, before copayment.
A study of 1,007 patients on long-term H2RA therapy (defined as 6 months or more) found that PUD was the most common indication for H2RA prescribing (42%). PUD was found in 58% of patients receiving long-term H2RA drug therapy who had their HP serology tested and were HP-positive. 16 While two thirds (67%) of the patients reported improvement in quality of life following HP eradication, and H2RA use was reduced, there is no guarantee that PUD patients treated with an HP-eradication recipe will discontinue use of H2RA or PPI drug therapy. The findings noted above, in which clinical pharmacist intervention in an HP-eradication intervention was associated with no resumption of acid suppression therapy at 1-month follow-up, need validation over a longer follow-up period. It is entirely possible that HP eradication, achieved at any incremental cost as measured in total prescription drug expenditures, results in some relief of symptoms in a majority of patients on long-term acid-suppression therapy.
For managed care organizations in 2003, the direct drug cost at discounted prices, before member copayment or pharmacy dispensing fees, was about $44 for quadruple therapy for 7 days with PBMT7 or $102 for 7 days with triple therapy PAC7, compared with about $250 for the commercial packaging of 14 days of therapy with lansoprazole, amoxicillin, and clarithromycin. 17 Avoidance of even 1 month of therapy with a PPI in 1 of 2 patients treated with PBMT7 or PAC7 would cover the direct drug cost of most HP eradication recipes. For patients with PUD, HP infection is present in 85% to 95% of patients, and eradicating HP is effective in healing the ulcers. 18 For patients with NUD, the relative risk reduction for persistent dyspeptic symptoms (the same or worse) at 3 to 12 months following HP eradication is 9% compared with placebo, and the number needed to treat is 15 NUD patients to obtain 1 case of cured dyspepsia. 19 The cost to obtain 1 dyspeptic-free NUD patient with PBMT7, the lowest-cost therapy, is therefore $660 in 2003 dollars versus $1,530 for PAC7 or $3,750 for the commercial package of lansoprazole, amoxicillin, and clarithromycin.

ss Formulary Management Methods and Pharmacoeconomics
Twenty years ago, 40% of hospitals stocked a single drug product to represent a therapeutic category, and 31% of hospitals allowed automatic therapeutic interchange performed by pharmacists. 20 In calendar year 2002, 88% of hospitals with greater than 100 beds employed therapeutic interchange as part of formulary management. 21 Cost-effectiveness analysis is a fundamental part of determining the value of drug therapy compared with the cost, or the value-for-money equation. Yet, most pharmacy and medical directors involved in drug formulary decisions of pharmacy and therapeutics (P & T) committees apparently have an inadequate understanding of basic terms and methods of pharmacoeconomics (PE). A survey conducted in 1999 and reported in the March/April 2000 issue of the Journal 22 found that (a) while most pharmacy and medical directors involved in drug formulary decisions believed that their P & T committees understood pharmacoeconomics, only 17% felt that their committee understood pharmacoeconomics completely and (b) most terms in pharmacoeconomics were not well understood, e.g., 71% of respondents reported inadequate understanding of qualityadjusted life year, 78% conjoint analysis, 88% the Markov model, and 95% league tables. There is also distrust of pharmacoeconomic data, perhaps since most pharmacoeconomic analyses are sponsored by manufacturers of the products that are the subject of the PE analyses. 23 In addition to apparent poor understanding of PE terms and methods and distrust of PE data among decision makers, bias in PE studies is unavoidable, creating a ripe opportunity for mistrust. PE studies use economic data applied to an inferred association between one or more independent variables and a dependent variable. 24 The PE researcher has control over the selection of economic data, inclusion criteria, range of independent variables, and the dependent variable. Selection bias is a potential source of error in any study, and a common threat is nonrandom, nonresponse data or otherwise nonrandom missing data. For example, using medical claims data will show a lower incidence of diagnoses of depression than would patient chart data, which would have a lower incidence of diagnoses of depression than that inferred from examination of prescription drug claims data. The PE literature would be improved in reliability and transparency if each published study described (a) the methods used to reduce selection bias; (b) treatment of the missing data; (c) the key assumptions and data sources; (d) the disaggregated costs and outcomes, comparing the new therapy with the existing one; and (e) where relevant, the costs, consequences, and incremental cost-effectiveness ratio by patient subgroup. 25

ss Prescription Drug Expenditures, Financial Burden, and Health Plan Satisfaction Among Medicare Beneficiaries
Researchers have for years been studying the milieu of factors associated with the large variation in prescription drug utilization among Medicare beneficiaries. There is potential for greater financial burden imposed by prescription drugs among the elderly who on average use 3 times the number of prescriptions per month compared with persons younger than 65 years. 26 But the distribution of drug expenditures and financial burden is not uniform. Seventeen percent of Medicare beneficiaries had no ($0) spending on prescription drugs in calendar year 2001, while spending of $1,000 or more was found among 28% of Medicare beneficiaries and accounted for 76% of total expenditures for prescription drugs for this population. 27 According to data obtained from the Medicare Current Beneficiary Survey, 76% of all Medicare beneficiaries had some drug coverage at some point in 1999, up from 73% in 1997 and 1998 and considerably higher than the 57% reported in 1992. 28 About one third of the supplemental prescription drug coverage among Medicare beneficiaries was employer-sponsored and 17% (12.8% of all Medicare beneficiaries) had drug coverage through a Medicare+Choice plan). But, Medicare+Choice plans became unavailable to about 2.5 million Medicare beneficiaries between 1998 and 2002, 29 and employer-sponsored prescription drug benefits for Medicare beneficiaries aged 65 to 69 years declined from 40% in 1996 to 35% in 2000. 30 For the 5-year period through 2003, Medicare+Choice plans with any prescription drug coverage declined from 73.4% in 1999 to 66.1% in 2003, and the percentage with an annual maximum drug benefit maximum increased from 23.3% to 70.0%. 31 When weighted by enrollment, 83.9% of Medicare+ Choice members had a prescription drug benefit in 1999, dropping to 68.9% in 2003. In 1999, only 10.6% of Medicare+ Choice members had a limited drug plan benefit with a $500 annual maximum, but by 2003, 53.4% of Medicare+Choice members had an annual drug benefit maximum of $500. In the Commonwealth Fund data, a relatively small portion of Medicare+Choice plans applied the annual benefit maximum through a quarterly cap, affecting 12.2% of members in 1999 and 8.8% of members in 2003, but these data differ from other data sources that show that among HMOs that imposed drug benefit maximums (83% of plans affecting more than two thirds of membership) in 2001, 42% imposed an annual cap (average $1,160), 47% had quarterly caps (average $351), and 11% imposed monthly caps (average $80). 32 Cost sharing in the form of copayments per prescription has also increased. The average generic copay was $10 or less for 84% of members in 1999 versus 72% in 2003. The brand copay was $20 or more for 14% of members in 1999, rising to 74% of members in 2003. An emerging trend was found in coverage of generic drugs only, affecting 11% of Medicare+Choice members in 1999, rising to 41% in 2003in 2002, 90% of members with a generic-only benefit had no annual benefit maximum. Among basic Medicare+Choice plans, 60% covered only generic drugs in 2003. Copayments for primary care and specialist office visits also increased, and 82% of members were subject to some type of cost sharing for inpatient hospital admissions in 2003.
Commercial health plans are reluctant to drop coverage of prescription drugs for Medicare beneficiaries for a multitude of reasons, including the perceived value of these benefits among members and the apparent favorable influence that drug coverage has on member satisfaction. A survey in 2001 of 3,457 adults aged 19 years or older, including Medicare-eligible beneficiaries, found that Medicare beneficiaries who had prescription drug coverage were 50% more likely than those without it to rate their insurance as excellent and about one half as likely to report medical bill problems. 33 The percentage of Medicare enrollees aged 65 years or older who rated their insurance as excellent was 36% among members enrolled in plans with prescription coverage compared with 22% for members in health plans without prescription drug coverage. The percentage of Medicare enrollees aged 65 years or older who reported any medical bill problem was 15% for plans with prescription drug coverage versus 29% for Medicare members in health plans without prescription drug coverage.
In a previous issue of the Journal, McKercher, Taylor, Lee, Chao, and Kumar found that prescription drugs in elderly families accounted for approximately twice the proportion of total out-of-pocket medical care burden compared with nonelderly families, 45.6% and 23.7%, respectively. The higher proportion of total medical care burden and total economic burden attributable to prescription drugs in the elderly was traced to larger prescription quantities, price, and utilization, but not more expensive drugs. In this issue of the Journal, Schommer, Mott, Hansen, and Cline found the proportion of senior citizens without any prescription insurance coverage did not change significantly-from 32% in 1998 to 29% in 2001. 34 However, the proportion of respondents with prescription drug coverage that had to share costs of prescriptions through copayments and coinsurance rose significantly-from 69% in 1998 to 89% in 2001.
A key question that begs for useful answers is what behaviors result when persons with prescription drug needs encounter financial barriers to access. Schommer, Mott, Hansen, and Cline found that the proportion of senior citizens who used mail-order pharmacies increased from 17% in the 1998 survey to 27% in the 2001 survey. A Harris Interactive